| (1) | If the holder of rights which are hypothecated under a registered mortgage bond, other than a mortgage bond to secure the obligations of a surety, transfers or cedes to another person all such hypothecated rights, the Director-General may, notwithstanding the provisions of section 37(1), register the transfer or cession and shall substitute the transferee for the transferor as debtor in respect of the bond, provided the written consent of the holder of the bond and of the transferee to the substitution in respect of the bond for the amount of the debt disclosed therein is produced to the Director-General in duplicate. |
[Section 38(1) substituted by section 30(a) of Act No. 24 of 2003]
| (2) | In registering the transfer or cession the Director-General shall— |
| (a) | make an entry in the appropriate register setting forth— |
| (i) | that the debt of the transferor secured by the bond is cancelled; and |
| (ii) | that the transferee has become the debtor in respect of the bond; |
| (b) | annex one duplicate of the written consent referred to in subsection (1) to the bond and file the other in his or her office and make reference on the registry duplicate of the bond to such filing; |
[Section 38(2)(b) substituted by section 30(b) of Act No. 24 of 2003]
| (c) | endorse upon the bond – |
| (i) | the name of the transferee; |
| (ii) | the date and number of the transfer or cession; |
| (iii) | a reference to the said written consent; and |
| (iv) | that the transferee has been substituted for the transferor as debtor in respect of the bond; and |
| (d) | endorse on the deed of transfer or cession the mortgage with the date and number of the bond and the amount due in terms thereof; |
[Section 38(2)(d) substituted by section 30(c) of Act No. 24 of 2003]
| (3) | As from the date of registration of the transfer or cession, the transferor shall be absolved from any obligation secured by the bond and the transferee shall be substituted for him or her as the debtor in respect of such bond and shall be bound by the terms of the bond in the same manner as if he or she had passed the bond and had renounced therein the benefit of all relevant exceptions. |
[Section 38(3) substituted by section 30(d) of Act No. 24 of 2003]
| (4) | The provisions of this section shall not apply if the mortgaged rights are to be transferred or ceded— |
| (a) | to a person who would not himself be competent to mortgage them; or |
| (b) | to two or more persons, unless they take transfer or cession of the rights in undivided shares and renounce in the written consent referred to in subsection (1) the exception de duobus vel pluribus reis debendi. |
[Section 38(4) substituted by section 20 of Act No. 132 of 1993]
